93 F.3d 1 (1st Cir. 1996), 95-2286, In re Three Additional Appeals Arising Out of San Juan Dupont Plaza Hotel Fire Litigation

Docket Nº:95-2286 to 95-2288.
Citation:93 F.3d 1
Party Name:In re THREE ADDITIONAL APPEALS ARISING OUT OF the SAN JUAN DUPONT PLAZA HOTEL FIRE LITIGATION.
Case Date:August 19, 1996
Court:United States Courts of Appeals, Court of Appeals for the First Circuit
 
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93 F.3d 1 (1st Cir. 1996)

In re THREE ADDITIONAL APPEALS ARISING OUT OF the SAN JUAN

DUPONT PLAZA HOTEL FIRE LITIGATION.

Nos. 95-2286 to 95-2288.

United States Court of Appeals, First Circuit

August 19, 1996

        Heard Aug. 1, 1996.

        Peter B. Ackerman, with whom W. Mark Wood and O'Melveny & Myers, Los Angeles, CA, were on brief, for appellants California Union Ins. Co., Central Nat'l Ins. Co. of Omaha, Ins. Co. of N. Am., and Pacific Employers Ins. Co.

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        Paul K. Connolly, Jr., with whom Damian R. LaPlaca, LeBoeuf, Lamb, Greene & MacRae, L.L.P., Boston, MS, Andrew K. Epting, Jr., G. Trenholm Walker, and The Wise Law Firm, Charleston, SC, were on brief, for the remaining appellants.

        Joseph L. Golden, Los Angeles, CA, for appellees Tertiary, Inc. et al.

        Theodore A. Pianko and Christie, Parker & Hale, Pasadena, CA, on brief, for appellees Hotel Systems International, et al.

        Before SELYA, CYR and LYNCH, Circuit Judges.

        SELYA, Circuit Judge.

        These appeals commemorate the latest flight of the phoenix that rises repeatedly from the ashes of the tragic fire that engulfed the San Juan Dupont Plaza Hotel a decade ago. Today, we review the district court's actions following the remand that we ordered in an earlier opinion. See In re Two Appeals Arising Out of the San Juan Dupont Plaza Hotel Fire Litig., 994 F.2d 956 (1st Cir.1993). Finding, as we do, that the district court's determinations comport with the parameters that we set in Two Appeals and fall squarely within the realm of judicial discretion, we affirm.

       I. BACKGROUND

        We sketch the background of these appeals, cognizant that readers who hunger for more detail can find it in a myriad of reported cases, including our earlier opinion. See, e.g., id. at 959-60.

        The sprawling litigation that burst forth from the smoldering embers of the charred hotel encompassed wrongful death, personal injury, property damage, and other claims brought by more than 2,000 plaintiffs against more than 200 defendants. In an effort to tame this behemoth and to orchestrate the proceedings, the district court devised an innovative case-management system. The system included the appointment of liaison counsels (to facilitate interactions both between the court and the legion of lawyers linked to the litigation as well as among the lawyers themselves); the formation of a Joint Discovery Committee ("JDC") to coordinate discovery initiatives; and the creation of a Joint Document Depository ("JDD") as a resting place for all pleadings, discovery materials, and the like. See id. at 959. To pay for this case-management system, the trial judge imposed mandatory assessments on all litigants.

        The appellants (whom we shall call "the pre-fire insurers") comprise thirteen insurance companies that had issued liability policies to firms which eventually became defendants in the underlying litigation. 1 The quondam insureds settled with various claimants and then sued the pre-fire insurers for indemnification, notwithstanding that all the policies had expired prior to the conflagration. Not to be outdone, the original plaintiffs joined the pre-fire insurers as direct defendants. Though they had been brought late into the fray, the district court levied an assessment against each pre-fire insurer for a standard "defendant's share" (which, over time, amounted to roughly $41,500). Like all such assessments, these funds were slated for use in defraying the expenses associated with the case-management scheme.

        Fairly early in the game, the pre-fire insurers moved for summary judgment on all claims against them. After a lengthy interval, the district court granted their motions but ordered sua sponte that they bear their own costs. The court afforded the pre-fire insurers no opportunity to be heard. Moreover, it did not specifically mention the cost-sharing assessments.

        The pre-fire insurers appealed the denial of costs. In deciding those appeals, we ruled, inter alia, that a trial court has the power to reallocate monetary assessments imposed as part of a case-management system. See id. at 965. Because the district court did not give the pre-fire insurers a fair chance to seek reallocation of those costs, we remanded so that they might ask the district court to determine whether the circumstances

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warranted some redistribution of the payment burden. See id. at 969. The pre-fire insurers made the request, but, in the end, it went unrequited. See In re San Juan Dupont Plaza Hotel Fire Litig., MDL-721, Order No. 581 (D.P.R. Aug. 17, 1995).

        On appeal, the pre-fire insurers contend that the district court ignored the guideposts we erected in Two Appeals for evaluating case-management cost-reallocation claims. They also contend that the lower court failed to recognize that they had established a prima facie case for reallocation. Finally, they complain that they did not receive any benefit from the case-management system, and that, therefore, the court improperly refused to relieve them from the standardized assessments. 2

       II. DISCUSSION

        Because the district court has spelled out an acceptable basis for its cost-sharing orders and for its refusal to grant a special dispensation to the pre-fire insurers, we affirm principally...

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